1. A symbol with many meanings

2. Gl balOrganization Knowledge Creation Summary of The Knowledge-Creating Company, Chapter 7by Ikujiro Nonaka & Hirotaka Takeuchi Presenters: Dwi Arti Anugrah, Endro Catur Nugroho, Marlisa Kurniati, Tri Kuncoro WatiFaculty of Psychology, Universitas Indonesia, 2013 Information in this document is intended for academic purposes only. 3. What We Will Learn...For product development, the Japanese companiesapproach to organizational knowledge creation (OKC) can be applied, with some adjustments, both in the context of overseas business development and global joint operation. 4. Reminder... Last presentationsQuestionOKC by JapaneseHow OKC takes place on acompanies: global scale?1. Management process: 1. Can these OKCs work middle-up-down outside Japan? management2. What adjustments2. Organizational structure:needed for partnership hypertext organization with non-Japanesecounterparts outsideJapan? 5. Organizational Knowledge CreationCompaniesWesternJapanese andCompanies Interaction between tacit and Emphasize on knowledge Enabling organizational condition explicit creation 6. OKC: Differences Between Japanese and Western CompaniesJapaneseWesternInteraction between Group level Individual leveltacit and explicit(usually middle managers) (usually top leaders)Emphasize onTacit knowledge Explicit knowledgeknowledge creation intuition, figurative language and paralysis by analysisbodily experience oral and visual quick internalization groupthink overadaptation to past successEnabling Ambiguous organizational intentions Clear organizational intentionorganizational High redundancy of information and Individual autonomycondition tasks Creative chaos through individual Frequent fluctuation from top differencesmanagement Less fluctuation from top management High autonomy at the group level Less redundancy of information High requisite variety through cross- Requisite variety through individualfunctional project teamsdifferences 7. Case Study: Nissan Primera ProjectWhat we learn: A new product development approach that combines the best of Japanese "rugby style" and European "relay style" for shorter lead time yet high performance cars. 8. Nissan Primera Project high performanceimage, image, plush, plush,optionsoptionsGrand Concept 9. Nissan Primera Project$ $ $80% Criteria* *by top management, first time in Nissan 10. Nissan Primera ProjectGrand Concept:Nissan Primera (1986): global car that fits to: European market: high performance US and Japan market: images, plushy andoptionsCriteria:1. Be manufactured in Japan and Britain2. Have 80% of components made in Europe3. Be sold primarily in European market and additionally US and Japanese market(by top management, first time in Nissan) 11. Product Development1.Product Strategy Division: planning, design,testing, production and marketing2.Development Team: eight Japanesemanagers 12. Product DevelopmentProduct Strategy Division Model 1Model 2 Model 3 Planning PlanningPlanning Body design Chassis design Engine design Exterior design Interior design TestingProductionMarketing 13. Product Development1.Product Concept: Comfortable Functionality -> "Sure, Fast, andComfortable on the Autobahn" Comfort 10 50-page catalog that included many sketchesexternalizing mental model or image of Primera 14. Product DevelopmentCommunicating the Gathering Informationproduct concept and in Europe: Europeanbuilding wider support: Liaison TechnologyAutobahn! Office 15. Product Development1.Communicating the Product Concept andBuilding Wider Support: Sending 1500 peopleto Europe to drive on the Autobahn andacquire tacit knowledge about Europeanautomobile market, motoring culture androad conditions2.Gathering Information in Europe: EuropeanTechnology Liaison Office in Brussels wasestablished 16. Nissan PrimeraProduct Development 17. Nissan PrimeraProduct Development Develop 1/4 clay models and design review Develop full scale clay model and interior review Develop prototype and 180,000km test (exceeded thenorm) Develop interior and 800km test Develop new engine and multilink suspension 18. Product DevelopmentDesigning Primera: to outengineer Benz andBMW (and lead the world)Process: Develop 1/4 clay models and design review Develop full scale clay model and interior review Develop prototype and 180,000km test (exceeded the norm) Develop interior and 800km test Develop new engine and multilink suspensionForming the Yazaki Group: a group of selecteddevelopment engineers and skilled test drivers 19. Product DevelopmentQualityissuesCost? design$$$$production 20. Product Developmentfactorytacit knowledgeIssuesSolutionsResult suppliersfactory 21. Product DevelopmentProduction people was directly involved in theearly stage of designPrimera production constraint:1. Quality of Japanese cars2. Cost-constraint (remember: mid-range)Issues, solutions and result:1. Production is in Japan and Britain (NMUK), (tacit) production knowledge is in Japan.2. British suppliers were not familiar to Nissan production. 22. Result and Implication QuantityQualityexceeding target multiple award-winning 23. Result and ImplicationPrimera as Global Car 1. Annual production target in Europe(100,000) exceeded (124,000) 2. Annual production target in Japan (3,000)exceeded (6,260) 3. Winning 19 best car prizes throughoutEurope 24. Result and ImplicationSocialization & Externalization !!!factoryexplicit knowledgetacitIssuesSolutionsResult suppliers factory 25. Result and ImplicationPrimera case emphasizes importance ofsocialization and externalization:1. Socialization of Europe market by sending Japanese engineers to Europe2. Externalization (in the form of manuals) and socialization of Japanese (tacit) car manufacturing knowledge by sending British engineers to Japan 26. Result and ImplicationNew product development approach:American football 27. Result and Implication CONCEPT CONCEPTCONCEPTNew product development approach:American football 28. Result and ImplicationNew product development approach: Americanfootball1. Rugby Style: shorten product development lead time (for even shorter than already short compared to European) by overlapping design and manufacturing cycle.2. Relay Style: phased production cycle.3. American football (the new style): combination of Rugby Style and Phase Style, which leads to short lead time andhigher performance level 29. European and Japanese StyleCONCEPTCONCEPT European StyleJapanese StyleObjectiveSuperior performanceAdaptation to changing needsProduct Appeal FunctionImage and qualityProduct conceptClear cut decision at the initial stage, adhered to Vague at initial stage. Modified and alltered increation throughout the ensuing stages ensuing stages in accordance with change in needsFlow of activities Sequential approach Overlapping approachEnsuing processSpecific design targets fixed at the initial stageClose cooperaton among all departments conserned are pursued under strict division of laborduring the developmentOrganization According to function and often under a project Matrix or project team-type organization under a leader with limited authority project leader with authority over the entire process from planning to production to salesStrength Conducive to a relentless pursuit of superior Shorter lead time (3-4 years), high quality, and performance, function and quality attuned to needs in the marketWeakness Longer lead time (7-8 years), high developmentRisk of compromise on a low level; not conducive to costs an all-out pursuit of superior performance 30. CONCEPTNew ProductDevelopment ApproachAmerican Football Style:1. Early stage (grand concept -> technical concept -> product concept): determined and clarified by a small number of project leaders, instead of long and continuous interaction among project members (Japanese rugby style).2. Division of labor is established: teams are specialized for certain functions that move simultaneously (as in rugby style) running together to meet target: cost, performance level, launch date. 31. CONCEPT New Product Development ApproachThe key to American Football Style:1. Comprehensive plan early in the game2. Tactics decided by few leaders 32. Case Study:Shin Caterpillar Mitsubishi (SCM)1963 : MHI Ltd + Caterpillar formed SCM 33. SCM background Caterpillar was a limited produce companyfor hydraulic shovels. MHI eager to eliminate unnecessaryduplication between Hydraulic Shouvel KOMATSU entered market in 1982 34. Clash on SCMConcern ItemsJapaneseEuropean-AmericanApproach Cost-quality-performance- safety-performance-quality- safetycostWhose Lead the Concept Research & DevelopmentMarketing DevelopmentCreation Process DepartmentProject Carried-out1. concept making1. Sequentially processDevelopment2. pararel on prototyping-on concept making- pilot running-preparing for prototyping-pilot mass production running-mass 3. product development 3-4production years2. product development 5-10 yearsStandardized DesignNeed to standarized 35. How organizeREGA PRoject Matriks organization a. Planning division :large, medium, small b. Design divison: structure, hydraulic mechanism, electric system, otherequipment Relationships between leader a. good communication b. located next to each other c. spent much time together (private and business) Standardizing for global market a. interplant meeting to enhance socialization for 3 different plants b. standard design drawing c. common product-decided by team each component d. multiselection concept - tested the idea with dealers - produce main sellingpoint. 36. Knowledge Creation on REGA Project1. Japanese externalize their tacit knowledge into explicit through socializations (interplant meeting, self organizing team)2. American rest on externalization through a. standardized operation manuals b. through cost monitoring system 37. Key Success Factor on applied organization knowledgeoutside of Japan1. Strong participation commiment from top management2. Middle managers are assigned as global knowledge engineer3. Sufficient level of trust among participants shoud develop4. Strong ocialization and externalization 38. Summary1.The Japanese approach to OKC can beapplied outside of Japan.2.The key is a prolonged phase of socializationand externalization due to different culture3.Organizations needs to identify their culturalbarriers to speed up knowledge sharing